The National Pension Commission (PenCom) is providing global best practices in pension regulation and supervision, the Director-General, Mrs. Aisha Dahir-Umar, has said.
Mrs. Dahir-Umar said the commission has been steadfast in its administration, with the staff and management shunning malpractices.
She said the Pension Fund Assets under Management (AuM), which stood at about N15trillion as at last December, increased by N156.74 billion in Q3.
She said the operators, which include Pension Fund Administrators (PFAs), Pension Fund Custodian (PFCs) and Closed Pension Fund Admistrators (CPFA), have also been complying with the Pension Reform Act (PRA) 2004.
She said they were doing their best to keep the pension fund under the Contributory Pension Scheme (CPS).
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She maintained that while it had not been easy keeping off elements that think the fund is another national cake to be shared, she and the staff members of the commission would ensure that they were eradicated.
She assured workers of safety of the fund and promised that retirees would continue to receive their pension promptly.
She noted that pension administration before 2004 was bedeviled by many problems.
She said: “Prior to the enactment of the Pension Reform Act 2004, pension schemes had been bedevilled by many problems.The Public Service operated an unfunded Defined Benefits Scheme (DBS) and the payment of retirement benefits were budgeted annually.
“The annual budgetary allocation for pension was often one of the most vulnerable items in budget implementation in the light of resource constraints. In many cases, even where budgetary provisions were made, inadequate and untimely release of funds resulted in delays and accumulation of arrears of payment of pension rights. It was obvious, therefore, that the DBS could not be sustained.”
The DG continued: “In the private sector on the other hand, many employees were not covered by the pension schemes put in place by their employers and many of these schemes were not funded. Besides, where the schemes were funded, the management of the pension funds was full of malpractices between the fund managers and the Trustees of the pension funds.
“This scenario necessitated a re-think of pension administration by the administration of President Olusegun Obasanjo.
“Accordingly, the administration initiated a pension reform to eliminate the problems associated with pension schemes. The outcome was the enactment into law of the Pension Reform Act 2004,” she noted.
The PenCom chief added that the Third Quarter 2022 Report provides stakeholders and the public with details of strategic activities that focused on ensuring the prompt payment of retirement benefits, as well as efforts aimed at promoting a vibrant and sustainable pension industry that positively impacts the economy.
“I would like to commend the sustained efforts of the staff and management of the commission, which ensured the achievement of the commission’s medium and long-term objectives. I am also delighted to mention that despite the overwhelming head-winds in the global economic climate and the country’s challenging macroeconomic environment, the Pension Fund Assets under Management (AuM) increased by N156.74 billion from ?14.27 trillion as 30 June 2020 to N14.42 trillion as at 30 September 2022. This laudable performance, in the growth of the AuM, points to the fact that the pension industry will continue to deliver value and benefit to its stakeholders and the nation’s economy.
“During the period under review, the Commission steadily pursued increased diversification of pension fund portfolios by ramping up efforts aimed at ensuring sustained investment of Pension Fund in alter- native Asset classes and structured infrastructure projects that meet the stringent requirements as enshrined in the Regulation for the In- vestment of Pension Fund Assets. Although the Commission’s efforts at diversifying investments of pension funds and hedging against inflation has gradually begun to yield results, it is, however, worthy to note that efforts are ongoing to ensure that the annualized average rates of return of pension funds across RSA and Legacy Funds are above headline inflation rates.”
She continued: “Perhaps, the most significant achievement recorded in the third quarter of 2022 was the successful issuance of Guidelines on Accessing RSA Balance towards payment of Equity Contribution for Residential Mort- gage. The Guidelines give effect to Section 89(2) of the Pension Re- form Act (PRA) 2014, which allows eligible RSA holders to apply a per- centage of the balances in their Retirement Savings Accounts for payment of equity contribution towards residential mortgage for employees of the Public, Private and the Informal Sectors.
“This significant achievement in the Nigerian Pension Industry could not have been possible without the right people, strategy, culture and governance structures that support the delivery of consistent and sustained value for all our stakeholders. We have, once again, demonstrated our firm assurance to serving the needs of our stakeholders and providing global best practices in pension regulation and supervision”, she added.